Philip Lowe, director-general at the EU executive's competition wing, said Brussels wants to ensure access to safe and effective innovative medicines and stressed the need to reform Europe's patent system.
"The European Commission has recognised the importance of these challenges by bringing together the services of DG Enterprise and DG Sanco," he said, referring to the decision to take responsibility for medicines policy from the industry commissioner and hand it to the health commissioner.
Lowe told MEPs that the Commission's inquiry into the pharmaceutical sector revealed practices that delayed the market entry of cheaper generic medicines. He said every patient in the EU spends an average of €430 per year on medicines, and the total spending on drugs is approximately 2% of Europe's GDP.
"It's no secret that public health schemes are currently under pressure to save money. It's obviously not easy to save on breakthrough drugs so most governments are now looking to make savings through generics," he said.
He said the inquiry had shown that generics enter the market 25% cheaper than the previous price of the originator medicines, and this price is 40% lower within two years, representing significant savings.
Companies holding up launch of generic drugs
Generic drugs can be launched once the patent runs out on an original medicine, but Lowe said there was concern that patent-holding firms are deliberately holding up the availability of generics.
"We went on to look at whether more savings can be achieved and we found there are significant delays to market entry for generic products," he said.
A range of "tools" are used by research-based medicine companies to slow the arrival of generics, he said, including the filing of multiple patents on the same products and the initiation of lengthy litigation proceedings.
These tools may be used in pursuit of legitimate objectives, but can lead to "unfortunate trends". "Some blockbuster medicines are protected by up to 1,300 patents or pending patent applications across the member states. One of their aims is to delay or block market entry of generics," Lowe told MEPs.
Patent system in need of reform
He also acknowledged that Europe's fragmented intellectual property landscape can lead to lengthy delays, with patent litigation cases lasting an average of 2.8 years and producing inconsistent results across the EU.
"The current system is also relatively expensive to everyone, although very profitable to the legal professions," he said. Courts in EU member states give conflicting verdicts in around 11% of cases, according to the competition official, who called on patent offices to avoid granting "weak patents".
Lowe said the EU will continue to monitor settlement agreements between pharmaceutical companies and will clamp down on instances where firms reach agreements that ultimately limit market entry of generic drugs.
However, he noted that drug pricing was a matter for member states and stressed that Brussels was "not trying to solve all the problems of the healthcare sector" through its powerful competition machinery.
"As far as protecting the activities of those who are innovating, I think I'm clear that whatever we do in the competition law field should not only protect that but promote that. Competition can only exist when innovators are rewarded," he said.
If there had been a slowdown in the pipeline of the pharmaceutical sector, it was certainly not a result of the EU's inquiry into the medicines sector, he added.
